25.25.9 Revenue Protection Prisoner Lead Procedures

Manual Transmittal

September 16, 2020

Purpose

(1) This transmits revised IRM 25.25.9, Revenue Protection, Prisoner Lead Procedures.

Material Changes

(1) IRM 25.25.9.1, Program Scope and Objectives - IPU 19U1219 issued 11-22-2019 - Corrected Policy Owner name, added stakeholders, added goals and link to manager IRM, corrected letter links.

(2) IRM 25.25.9.1.1, Background - IPU 19U1219 issued 11-22-2019 - Corrected Policy Owner name.

(3) IRM 25.25.9.1.2, Program Management and Review - IPU 19U1219 issued 11-22-2019 - Corrected Policy Owner name, added link to manger IRM, added link to Embedded Quality IRM.

(4) IRM 25.25.9.1.3, Authority - IPU 19U1219 issued 11-22-2019 - Added link to Servicewide Delegations of Authority, added section symbol for IRCs, spelled out acronyms.

(5) IRM 25.25.9.1.4, Responsibilities - IPU 19U1219 issued 11-22-2019 - Corrected Policy Owner name, corrected IRM links.

(6) IRM 25.25.9.1.6, Related Resources - IPU 19U1219 issued 11-22-2019 - Added paragraph and link to Taxpayer Bill of Rights, corrected policy owner.

(7) IRM 25.25.9.2, Prisoner Lead Processing Overview - IPU 19U1219 issued 11-22-2019 - Corrected Operation’s name.

(8) IRM 25.25.9.3, Prisoner Lead Clerical Sort and Routing of Initial Receipts - IPU 19U1219 issued 11-22-2019 - Corrected Operation name, corrected form titles and links.

(9) IRM 25.25.9.3.1, Prisoner Lead Clerical Processing of Correspondence and Forms - IPU 19U1219 issued 11-22-2019 Removed broken link for FTBOL spreadsheet, corrected form titles and links, corrected Exam routing guide title and link.

(10) IRM 25.25.9.3.2, Prisoner Lead Tax Examiner Processing of Correspondence and Forms - IPU 19U1219 issued 11-22-2019 - Corrected notice number, corrected form titles, spelled out acronyms.

(11) IRM 25.25.9.4, General Agreement on Tariffs and Trade (GATT) Returns - IPU 19U1219 issued 11-22-2019 - Corrected Operation name.

(12) IRM 25.25.9.5, Prisoner Lead Processing Returns (Kansas City) - IPU 19U1219 issued 11-22-2019 - Corrected Operation name, spelled out acronyms, corrected form titles.

(13) IRM 25.25.9.6, Prisoner Lead Indentity Theft Form Receipts - IPU 19U1219 issued 11-22-2019 - Spelled out acronyms, corrected IRM links.

(14) IRM 25.25.9.7, Refund Inquires - IPU 19U1219 issued 11-22-2019 - Corrected Operation name, spelled out acronyms, corrected IRM links, corrected letter titles.

(15) IRM 25.25.9.8, Prison Leads Involving Refund Checks - IPU 19U1219 issued 11-22-2019 Restricted internal fax number, spelled out acronyms, corrected IRM links.

(16) IRM 25.25.9.8.1, Prisoner Refund Check Inquires and Processing Refuned Prisoner Tax Refund Treasury Checks-Kansas City ONLY - IPU 19U1219 issued 11-22-2019 - Corrected Operation name, corrected IRM links, spelled out acronyms, added initial case actions, moved other procedures to new sections for clarity.

(17) IRM 25.25.9.8.1.1, Inquiry No Federal Tax Refund Check - IPU 19U1219 issued 11-22-2019 - New IRM subsection titled Inquiry No Federal Refund Check, procedures from IRM 25.25.9.8.1, revised for clarity.

(18) IRM 25.25.9.8.1.2, Inquiry with Federal Tax Refund Check - IPU 19U1219 issued 11-22-2019 - New IRM subsection titled Inquiry With Federal Refund Check, procedures from IRM 25.25.9.8.1, revised for clarity.

(19) Exhibit 25.25.8-5 - IPU 19U1219 issued 11-22-2019 - Deleted exhibit no longer used.

(20) Editorial changes made throughout the IRM section.

Effect on Other Documents

IRM 25.25.9 effective 9-20-2018 is superseded. This IRM also incorporates the following IRM Procedural Updates (IPUs): .

Audience

Campus employees in Return Integrity Verification Operations

Effective Date

(10-01-2020)

Related Resources

The following IRMs should be used in conjunction with one another:

  • IRM 25.25.1, Integrity and Verification Operation (IVO) Business Master File (BMF) Procedures

  • IRM 25.25.2, Revenue Protection Screening Procedures for Individual Master File Returns

  • IRM 25.25.3, Revenue Protection Verification Procedures for Individual Master File Returns

  • IRM 25.25.4, Integrity and Verification Identity Theft Return Procedures

  • IRM 25.25.5, Revenue Protection Special Handling Procedures

  • IRM 25.25.6, Taxpayer Protection Program

  • IRM 25.25.7, Automated Questionable Credit Program

  • IRM 25.25.8, Revenue Protection External Leads Procedures

  • IRM 25.25.10, Frivolous Return Program

  • IRM 25.25.11, Wage and Withholding (WOW) Only Procedures

  • IRM 25.25.12, Fraud Evaluation and Referral Procedures for Integrity and Verification

  • IRM 25.25.13, Account Resolution for Integrity and Verification Operation (IVO)

Denise D. Davis
Director, Return Integrity Verification Program Management
Wage and Investment Division

Program Scope and Objectives

  1. Purpose and Program Goals: This IRM section provides guidance for Return Integrity Verification Operations (RIVO) employees when in receipt of prisoner correspondence/returns/checks received through the Blue Bag Program from participating institutions.

  2. Audience: The audience intended in this IRM is RIVO employees.

  3. Policy Owner: The Return Integrity Verification Program Management (RIVPM) is the policy owner of this program.

  4. Program Owner: RIVPM is the program office responsible for oversight over this program.

  5. Primary Stakeholders: The primary stakeholders are RIVO, and organizations that collaborate with RIVO, such as; Submission Processing, Account Management, and Field Assistance.

  6. Program Goals: Program goals for the program are in the Operation Guidelines as well as IRM 1.4.10, Integrity & Verification Operation Managers Guide.

Background

  1. Return Integrity Verification Program Management (RIVPM) strengthens the integrity of the tax system by:

    • Protecting the public interest by improving IRS’s ability to detect and prevent improper refunds

    • Serving the public interest by taking actions fairly and appropriately to identify, evaluate and prevent the issuance of improper refunds

    • Helping taxpayers understand the refundable tax credits for which they are eligible

    • Recover Improper Payments

Program Management and Review

  1. The program has reports such as; the Return Integrity Verification Operation (RIVO) Monthly Performance Comparison Report, to track the inventory, including receipts and closures. Additional report guidance is found in IRM 1.4.10, Integrity & Verification Operation Managers Guide.

  2. The Embedded Quality review program is in place to review all processes to ensure accuracy and effectiveness of the program. Goals, measures, and operating guidelines are listed in the yearly Operation Guidelines and in IRM 21.10.1, Embedded Quality (EQ) Program for Accounts Management, Campus Compliance, Field Assistance, Tax Exempt/Government Entities, Return Integrity and Compliance Services (RICS), and Electronic Products and Services Support.

Authority

  1. Refer to the following:

    • IRM 1.2.2, Servicewide Policies and Authorities, Servicewide Delegations of Authority

    • IRM 1.1.13, Organization and Staffing, Wage and Investment Division.

    • Various Internal Revenue Codes (IRC) including but not limited to:

    • IRC § 6402(a), Authority to make credits or refunds

    • IRC § 6401, Amounts treated as overpayments

    • IRC § 6404, Abatements of tax

    • IRC § 6213, Restrictions on assessments and math error authority

  2. Refer to IRC GATT §32(c)(2)(B)(iv) for more information on GATT rule of disqualifying a prisoner’s income earned during incarceration for EITC.

Responsibilities

  1. Return Integrity Verification Program Management (RIVPM) has responsibility for information in this IRM. Information is published in the IRM on a yearly basis.

  2. The Director of RIVPM is responsible for the policy related to this IRM.

  3. The Chief of the RIVPM Policy & Analysis is responsible for ensuring this IRM is timely submitted to publishing each year.

  4. More information can be found in IRM 1.1.13.5, Return Integrity and Compliance Services.

Acronyms

  1. For a list of Acronyms used throughout Return Integrity Verification Operations (RIVO), see IRM 25.25.1.1.5, Acronyms.

Related Resources

  1. The related resources listed below may be utilized for account research and issue resolution. These related resources may be accessed through the IRS Intranet-Servicewide Electronic Research Program (SERP) site.

    • IRM 25.25, Revenue Protection

    • IRM 25.23, Identity Protection and Victim Assistance

    • IRM 21, Customer Account Services

    • IRM 2, Information Technology

    • IRM 3, Submission Processing

    • IRM 4, Examining Process

  2. IDRS restricted access accounts are accounts where a user must request special permissions to access the account through IDRS. Follow IRM 21.2.1.3.2, Authorized IDRS Access.

    Exception:

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  3. The IRS adopted the Taxpayer Bill of Rights (TBOR) in June 2014. Employees are responsible for being familiar with and acting in accordance with taxpayer rights. See IRC § 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. For additional information about the TBOR, see The IRS outlines the Taxpayer Bill of Rights.

Prisoner Lead Processing Overview

  1. Non-Return Integrity Verification Operations (RIVO) functions will route all items as appropriate based on existing IRM guidance and procedures.

  2. Items received in RIVO from correctional facilities through the Blue Bag Program will be date stamped by the receiving office, sorted into the following categories and routed as appropriate:

    • Tax returns - any Form 1040, U.S. Individual Income Tax Return, series (including copies and unsigned returns). Route returns to MS 6575 Prisoner Return KCSC, 333 Pershing Rd, Kansas City, MO 64108.

      Exception:

      Form 1040-X, Amended U.S. Individual Income Tax Return, filings currently under Examination (including copies and unsigned returns), are routed to the appropriate Exam Campus per SERP MySB/SE Routing Guide.

    • Checks
      Treasury checks - IRS refund check - route to MS 6575 Prisoner Return KCSC, 333 Pershing Rd, Kansas City, MO 64108.
      Treasury checks - Non IRS check - route to MS 975 Blue Bag BSC, 1040 Waverly Ave, Holtsville, NY 11742.
      Non-Treasury checks - payable to the taxpayer - route to MS 975 Blue Bag BSC, 1040 Waverly Ave, Holtsville, NY 11742.
      Non-Treasury checks - payable to the IRS - Route to local Submission Processing for posting to taxpayer’s account.
      Non-Treasury checks - payable to another agency - forward to appropriate agency (e.g. State or Local Tax Board).

    • Correspondence - route to MS 975 Blue Bag BSC, 1040 Waverly Ave, Holtsville, NY 11742.

Prisoner Lead Clerical Sort and Routing of Initial Receipts

  1. The Unit Control Clerk (UC) will date stamp all items received into the Operation, including undeliverable and non-delivered mail.

  2. The UC will review all items received for updated Incarceration/Release information and capture such data for the Operation on the provided FTBOL-FY20XX spreadsheet.

  3. All correspondence will be counted as receipts and loaded to the Blue Bag Lead Management System (Blue Bag LMS) by the UC, with the following exceptions:

    • mail from prison officials regarding IRS programs (route to Lead)

    • requests for program supplies (UC will follow-up on requests)

  4. UC will establish a control base for each piece of correspondence under the appropriate module.

    Exception:

    Undeliverable mail is not considered correspondence. Undeliverable mail should be returned to the originator.

  5. Returns received should be re-routed as shown below.

    • Tax returns - any Form 1040, U.S. Individual Income Tax Return, series (including copies and unsigned returns) - route to MS 6575 Prisoner Return KCSC, 333 Pershing Rd, Kansas City, MO 64108.

      Exception:

      Form 1040-X , Amended U.S. Individual Income Tax Return, filings currently under Examination (including copies and unsigned returns) are routed to the appropriate exam campus using the SERP MySB/SE Routing Guide.

  6. Checks will be processed as follows:

    1. Treasury checks - IRS refund checks - route to MS 6575 Prisoner Return KCSC, 333 Pershing Rd, Kansas City, MO 64108.

    2. Treasury checks - Non IRS check - return to facility using "non-IRS check quick note" .

    3. Non-Treasury checks - payable to the taxpayer - return to facility using "non-IRS check quick note."

    4. Non-Treasury checks - payable to the IRS - route to local Submission Processing for posting to taxpayer’s account. See paragraph (7) below.

    5. Non-Treasury checks - payable to another agency - forward to appropriate agency (e.g. State or Local Tax Board).

  7. If a live personal check is received take the following actions:

    1. Complete Form 4287, Record of Discovered Remittance.

    2. Attach a photocopy of the personal check and any pertinent information to the Form 4287.

    3. Notate any important information on the check such as the taxpayer’s Social Security Number (SSN), tax period and form number for correct processing.

    4. Route the check to Campus Support to be processed, see IRM 3.8.46.4, Remittance Discovered at a Campus Support Site.

Prisoner Lead Clerical Processing of Correspondence and Forms

  1. The Unit Control Clerk (UC) will close the control base, route, and take actions on the following correspondence items as shown in the chart below:

    Note:

    The UC will also notate and close cases in Blue Bag Lead Management System (LMS) as appropriate.

    Type of Receipt Actions needed
    1
    Non-delivered mail/items addressed to the taxpayer (i.e. Notice CP 2000 , Request for Verification of Unreported Income, Payments, or Credits, addressed to taxpayer returned unopened).
    Prepare Letter 4877, Blue Bag Refund Return, for correspondence and return to the taxpayer.
    2
    Outgoing personal mail from the taxpayer (i.e. letter to relative, letter to state tax department).
    Forward as appropriate.
    3
    Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return.
    Route to RAIVS per the form instructions.
    4
    Form W-7, Application for IRS Individual Taxpayer Identification Number, or Form W-7 (SP), Application for IRS Individual Taxpayer Identification Number (Spanish Version).
    • Route to Internal Revenue Service, ITIN Operation, Mail Stop 6090-AUSC, 3651 S. Interregional Hwy 35, Austin, TX 78741-0000.

    • Notate on Form 3210, Document Transmittal, that the filer is an inmate, and attach a copy of a CC FTBOL print if there is data present.

    5
    Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorization.
    Route to the Centralized Authentication File (CAF) function on Form 3210, Document Transmittal.
    6
    Form SS-4, Application for Employer Identification Number.
    Route to Internal Revenue Service Center, Attention: EIN Operation, Cincinnati, OH 45999.
    7
    Form 3911, Taxpayer Statement Regarding Refund, or Form 3913, Acknowledgment of Returned Refund Check.
    Route to BSC Refund Inquiry Unit Stop 547.
  2. UC will provide a daily accurate accounting to Lead of correspondence receipts and closures.

  3. All other items not listed above, are to be filed within the Operation for assignment to a tax examiner.

Prisoner Lead Tax Examiner Processing of Correspondence and Forms

  1. The tax examiner will re-route and take actions on the following correspondence items as shown in the chart below, in addition to updating all systems as appropriate:

    Type of correspondence Actions to take
    1
    • Informant letters

    • Identity Theft lists

    Route to Criminal Investigation per IRM 3.12.38.1.10.4 , Criminal Investigation (CI) Referrals.
    2
    Preparer Complaint.
    Send Letter 131C, Information Insufficient or Incomplete for Processing Inquiry, include Form 14157, Return Preparer Complaint. See Letters Job Aide for a list of paragraphs.
    3
    Request for Credit Report.
    Send credit report quick note to inmate.
    4
    Freedom of Information Act (FOIA) Requests.
    Route to the Disclosure Office. See FOIA and/or Privacy Act Request Contacts.
    5
    Request for copy of Employer Identification Number (EIN).
    Classified waste requests. Follow IRM 21.5.1.4.10, Classified Waste.
    6
    Identity Theft Correspondence (not Form 14039, Identity Theft Affidavit).
    • Ensure submission is not a duplicate that has already been processed.

    • Send Letter 131C with Form 14039 . See Letters Job Aide for a list of paragraphs.

    • Input transaction code (TC) 971 action code (AC) 522 on command code (CC) ENMOD using "WI IVO OTHER" for the appropriate year(s).

      Note:

      Exercise caution when contacting the taxpayer by mail. If the address on Form 14039 differs from the address on CC ENMOD, correspond to the address on the Form 14039.

    7
    Balance Due Correspondence.
    1. Check the Service Center Status.

    2. Status 22, route to Automated Collection System (ACS).

    3. If not in Status 22, route to Compliance Services Collection Operations (CSCO).

    4. Input a CC STAUP as needed.

    Route per ACS/CSCO Office finder on SERP.
    8
    Requests for blank forms and/or publications.
    • Send postcard Publication 5024, Order Notification for Prisoners, to inmate.

    • Input history on AMS, "Request from inmate dated XX/XX/XX for blank publication(s)/form(s). Sent Publication 5024 to taxpayer."

    9
    Tax Law Inquiry/Question.
    • Send tax law question postcard to inmate.

    • Input history on AMS, "Tax Law Inquiry from inmate dated XX/XX/XX. Sent Publication 5024 to taxpayer."

    10
    Handwritten/Typed Transcript Requests.
    Route to IRS, Austin Service Center, Stop 6567 AUSC.
    11
    Request from Identity Theft victim for copy of fraudulent return(s) involving refund-related identity theft where return was accepted and processed by the Service.
    Follow IRM 25.23.3.2.7, Providing Copies of Fraudulent Return(s) Involving Refund-Related Identity Theft - Procedural Overview.
    12
    Open Examination (-L Freeze/TC 420/ TC 424/ CC AMDISA).
    Route per the Exam Employee Group Finder on SERP MySB/SE.
    13
    Open AUR (TC 922, Notice CP 2000, Request for Verification of Unreported Income, Payments, or Credits, open/closed control).
    Route to AUR office per listing on SERP AUR Addresses.
    14
    Offer in Compromise (OIC) cases (TC 480/ TC 481/ TC 482/ TC 780/ TC 788).
    For open cases, route to the Centralized Offer in Compromise (COIC) per the routing guide on SERP for Offer in Compromise correspondence. For OIC ACCEPTED cases use the Monitoring of Offer in Compromise Accepted Offers (MOIC) routing guide on SERP.
    15
    Replies to Letter 105C, Claim Disallowed/Letter 106C, Claim Partially Disallowed.
    Return to originating office.
    16
    Requests for an appeal.
    Use the Appeals case routing guide for Letter 105C, or Letter 106C, letter responses (look under "To Appeals from External Sources" ).
    17
    Other Replies.
    Route to Controlling Office
    18
    Address Change Requests.
    In most cases, treat a Form 8822, Change of Address as classified waste. Do not change or update address.

    Exception:

    If there is an -S freeze for an undeliverable refund and the return verifies, route to Brookhaven Service Center (BSC) Refund Inquiry Team.

    • Prison to Prison is permissible.

    • Prison to Non-Prison is permissible with verification of identity and release.

    • Non-Prison to Prison is permissible with verification of identity and incarceration.

    • Changes to address (adding inmate number, correcting typographical error, changing prison’s physical address to prison’s mailing address, etc.) are permissible.

    19
    Frivolous Correspondence/Claim.
    See IRM 25.25.10-1, Frivolous Arguments, for examples (NOT exhaustive). Route to: IRS, Attention: Frivolous Return Program, 1973 N Rulon White Blvd, M/S 4450 OSC, Ogden, UT 84404.
    20
    Cases with Criminal Investigation Division Indicator(s).
    See your lead.
    21
    Form 14039, Identity Theft Affidavit .
    See IRM 25.25.9.6, Prisoner Lead Identity Theft Form Receipts.
    22
    Form 1040-X, Amended U.S. Individual Income Tax Return.
    • Route the Form 1040-X or amended return and envelope to the Submission Processing (SP) Batching Function per Exhibit 3.10.72-11, Submission Processing Contacts (Batching Function). Input a history item on IDRS of "1040X2SP"

    • If there is an open Exam case, route per the Exam Employee Group Finder on SERP MySB/SE.

    • Add a note in EFDS and AMS "BBF1040X" .

General Agreement on Tariffs and Trade (GATT) Returns

  1. Legislation in 1994 implementing part of the General Agreement on Tariffs and Trade (GATT) (IRC §32(c)(2)(B)(iv)), excluded amounts received for services provided by an inmate at a penal institution from the definition of earned income for the earned income tax credit (EITC) and credits which utilize the EITC definition of earned income. GATT returns are identified when a filer claims EITC (or a refundable credit that uses EITCs definition of earned income) based on valid wages and withholding earned while an inmate.

  2. Generally, most prisoners who file returns containing wages earned while incarcerated, regardless of filing status, are not entitled to the following refundable credits:

    • Earned Income Tax Credit (EITC)

    • Additional Child Tax Credit (ACTC), when claiming 2 or less children

    • Making Work Pay Credit (MWPC)

    • Recovery Rebate Credit (RRC)

  3. If you receive a prisoner check, please forward to Kansas City, Return Integrity Verification Operations (RIVO).

    • MS 6575 Prisoner Check KCSC, 333 Pershing Rd, Kansas City, MO 64108.

Prisoner Lead Processing Returns (Kansas City)

  1. Log the receipt of all Prisoner Returns in a master listing. After returns are completed by tax examiners, log the disposition of all returns in the master listing.

    Note:

    Income documents (IDOCs) on all returns should be captured on the spreadsheet.

  2. Tax examiners will take the following actions on all returns:

    1. Input a transaction code (TC) 971 action code (AC) 134 on the corresponding tax module

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  3. Returns meeting RIVO interest:

    1. Stamp "RIVO REV" .

    2. Edit computer condition code (CCC) "1" on the return.

    3. Establish a monitor control base using "BBMONITOR,A,MISC" and send the return for processing.

    4. Once the return posts to the Electronic Fraud Detection System (EFDS), load all IDOCs, notate and disposition as appropriate, then close the RIVO control base.

    Note:

    If sent to Automated Questionable Credits (AQC) as GATT, send to scheme, update in the Scheme Tracking and Referral System (STARS) to category 8 disposition TT, enter a CC TXMOD history item "GATTTOAQC" . Input TC 290 .00 with a hold code (HC) 4.

  4. Returns not meeting RIVO interest:

    1. Stamp "RIVO REV" .

    2. Input a TC 972 AC 134 with a 1 cycle delay.

    3. Establish a monitor control base using "BB-REFILE,A,MISC" and send the return for processing.

    4. Once the return posts to EFDS, load all IDOCs, notate and disposition to refile and close the IDRS control base.

Prisoner Lead Identity Theft Form Receipts

  1. Review Account Management Services (AMS), CC TRDBV for transcribed, scanned, amended or duplicate returns.

    Note:

    Exercise caution when contacting the taxpayer by mail. If the address on Form 14039, Identity Theft Affidavit, differs from the address on command code (CC) ENMOD, correspond to the address on Form 14039.

    1. Review form to determine if filer is claiming his/her tax professional engaged in Preparer Misconduct with respect to their filing, rather than a real ID Theft issue.

      If Preparer Misconduct is alleged, follow procedures in IRM 25.25.9.3.2, Prisoner Lead Tax Examiner Processing of Correspondence and Forms, paragraph 1, box 2, titled "Preparer Complaint."

      If Preparer Misconduct/Complaint is not alleged, see #2 below.

    2. Route to Identity Theft Victim Assistance (IDTVA).

Refund Inquiries

  1. Research the account for Return Integrity Verification Operations (RIVO) involvement and check the Electronic Fraud Detection System (EFDS) for the current return disposition. If there is a RIVO freeze on the account and verification is not complete, see the table below:

    Note:

    If no RIVO involvement on the account, route the inquiry to the Image Control Team (ICT).

    If EFDS Action IDRS Action
    1
    All income document(s) (IDOC(s)) verify good and a normal filing pattern is met.
    Disposition all IDOC(s) that are in Contact Employer (CE) and refile the return. See IRM 25.25.13.9 , Releasing the Refund, to ensure the refund is released.
    2
    Some or all IDOC(s) verify Bad or Incorrect dollars.
    Follow the guidance in IRM 25.25.3.4 , Income Verification using Command Code (CC) IRPTR.
    3
    Schedule C or Household Help Income (HSH).
    • Review the account to determine if the current return meets taxpayers’ normal filing pattern.

    • If normal filing pattern is met, "Refile" return and update notes in EFDS.

    • If normal filing pattern is not met, push to scheme, stop the refund, see IRM 25.25.2.4, Stopping the Refund. If a prior year return, see IRM 25.25.13.5 , Manual Referrals, to forward to Exam on referral spreadsheet.

    4
    Unsubstantiated wages or withholding.
    If the wages and/or withholding cannot be verified per CC IRPTR data, review other internal sources to verify the IDOCs. If the return can be verified, "Refile" the return in EFDS. If the return cannot be verified, push the return to scheme see IRM 25.25.2.5, Adding to Scheme. Take no action.

  2. If you click the CE button and it is in Hold "SA Requested" and the TE is unable to place back in "SA Requested" , the TE can edit the employer information. The employer notes will pop up, requiring a note to be input. Input a “.” and close the notes. Disposition the return and put "Hold On Rest" in the Group Disposition. After that, put the employer back into "Hold Other" and then give your lead the Employer Identification Number (EIN) so that it can be placed back in Hold "SA Requested" .

  3. If the return is in Scheme, Tracking And Referral System (STARS) follow table below:

    Note:

    A reason must be entered in the return's STARS or EFDS notes section whenever requesting a return be deleted from STARS, see Exhibit 25.25.13-1 , STARS Delete Reasons.

    If EFDS Action IDRS Action
    1
    Return is bad or incorrect dollars and no Notice CP 05A, Information Requested - Refund Held, has been sent or was sent prior to date of the correspondence.
    Do NOT release refund.
    2
    All IDOC's verify Good.
    Update the return disposition to "DL" in STARS and input the appropriate disposition note, see Exhibit 25.25.13-1 , STARS Delete Reasons. See IRM 25.25.13.9 , Releasing the Refund, to ensure the refund is released.
    3
    Return is bad or Incorrect dollars and STARS disposition is "NR" or "Blank"
    Change STARS return status to "CA" or "CE" and enter note: "PR CORR rec'd Income does not verify" . Update STARS return status to" CA" or "CE" Do NOT release refund.
    4
    Return is bad or incorrect dollars and STARS disposition is "OTHER" than "NR" or "Blank" and disposition date is over 60 days old
    Change STARS return status to "CA" or "CE" and enter note: "PR CORR rec'd Income does not verify" . Update STARS return status to "CA" or "or CE" Do NOT release the refund.
    5
    Return is bad or incorrect dollars and STARS disposition is "OTHER" than "NR" or "Blank" and disposition date is within 60 days
    Do not update STARS disposition Do NOT release the refund.

Prison Leads Involving Refund Checks

  1. Leads are received in Kansas City from prisons regarding refund checks issued by the Department of Treasury.

    Note:

    Other sites receiving a prison lead regarding prisoner refund checks should route the lead to Kansas City, fax number ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  2. All prisoner checks received in Return Integrity Verification Operations (RIVO) will be sent to Kansas City.
    Mailing Address is, Internal Revenue Service, MS 6575 Prisoner Check KCSC, 333 W Pershing Rd, Kansas City, MO 64108.

  3. Kansas City (Only) Tax Examiners (TEs) will follow procedures below in IRM 25.25.9.8.1, Prisoner Refund Check Inquiries and Processing Returned Prisoner Tax Refund Treasury Checks - Kansas City ONLY.

    Note:

    Route other payment types (money orders or checks payable to the Department of Treasury, etc.) to the appropriate campus Submissions Processing (SP) Payment Processing Unit (PPU) function.

  4. Update the 201X, Prison Check Request Spreadsheet, located on the Austin shared server.

Prisoner Refund Check Inquiries and Processing Returned Prisoner Tax Refund Treasury Checks – Kansas City ONLY

  1. These instructions should be followed by Kansas City; all others see IRM 25.25.9.8, Prison Leads Involving Refund Checks.

  2. Unit Control Clerk (UC) will log receipt of all Prisoner Checks in a master listing. The clerk will then file checks received for assignment to examiners. After completion by the tax examiners, the UC will also log the disposition of all checks.

  3. When an inquiry (copy of check or telephonic/fax/email/written inquiry) regarding the validity of a check in a correctional facility’s possession OR a returned prisoner tax refund check from a correctional facility is received, the examiner will take the following steps:

    • Review command code (CC) FTBOLP and the Prison-Provided incarceration/release information.

    • Research the associated return for Return Integrity Verification Operations (RIVO) interest as described in IRM 25.25.9.5(2), Prisoner Lead Processing Returns (Kansas City).

    • Review the account for disallowed payments on the module.

    • Input a transaction code (TC) 971 action code (AC) 134.

    • Open a control base on IDRS containing the following information:
      C#,PRSLEAD,A,MISC
      1481622222,NNNNNNNN - where "N" equals the received date of the inquiry or check

    • Input a history item:
      H,DONOTRFUND

    • Document the case and actions on the Account Management Services (AMS), see IRM 21.2.2.4.5, Account Management Services (AMS). The documentation should be input for the tax year of the inquiry or refund check.

    • Document the Electronic Fraud Detection System (EFDS) for the return associated with the inquiry or refund check.

    Once the research has been completed, follow the chart below:

    IF THEN
    The inquiry does not contain a federal tax refund check See IRM 25.25.9.8.1.1, Inquiry No Federal Tax Refund Check
    The inquiry contains a federal tax refund check See IRM 25.25.9.8.1.2, Inquiry With Federal Tax Refund Check

Inquiry No Federal Tax Refund Check
  1. An inquiry was received from a prison regarding a federal tax refund check. The inquiry does not contain a physical federal tax refund check. The research and procedures listed in IRM 25.25.9.8.1, Prisoner Refund Check Inquiries and Processing Returned Prisoner Tax Refund Treasury Checks - Kansas City ONLY, was completed.

  2. Follow the chart below to resolve the inquiry:

    IF THEN
    Research indicates the return associated with the inquiry meets Return Integrity Verification Operations (RIVO) interest.
    Requesting the return of the referenced check.
    1. Advise the prison the Service will be requesting the return of the referenced check.

    2. Do not disclose any specific information regarding the taxpayer’s account.

    3. Prepare the Memorandum for Return of Erroneously Issued Income Tax Refund Check for managerial approval and signature.

    4. Send the signed, approved memorandum to the facility via the approved method.

      Reminder:

      The memo must be signed by the supervisor or the acting supervisor prior to faxing to the prison. See IRM 11.3.1.14, Facsimile (FAX), Electronic Facsimile (E-FAX), and IRS Internal Enterprise Electronic Facsimile (EEFAX) Transmission of Tax Information.

    5. Place a copy of the memo and fax sheet in the required Prisoner folder.


    Account Resolution:
    1. Access the Treasury Check Information System (TCIS) and cancel the check with reason "F" , if not already done.

    2. Document the Account Management Services (AMS) and the Electronic Fraud Detection System (EFDS) (on the return associated with the refund) that the taxpayer can expect contact and identify the issue(s) with filing (e.g. General Agreement on Tariffs and Trade (GATT), inflated withholding, etc.).

    3. Input a transaction code (TC) 290 for .00 with a hold code (HC) 4 to post a -K freeze.

    4. Send the return through the appropriate RIVO treatment stream (manual referral to Automated Questionable Credits (AQC), Wage and Withholding Onlly (WOW), Examination (Exam) or systemically through the Scheme Tracking and Referral System (STARS)).


    If GATT:
    1. Input an IDRS history item "GATTTOAQC" .

    2. Update STARS to Category "8" , disposition "TT" .

    Research indicates the return associated with the inquiry does not meet RIVO interest.
    1. Advise the prison the Service is not requesting the return of the referenced check.

    2. Do not disclose any specific information regarding the taxpayer’s account.

    3. Input TC 971 AC 134 on the corresponding tax module (if one does not already exist) and then input a TC 972 AC 134 with a 1 cycle delay (this is for tracking purposes).

    4. Notate AMS and EFDS as appropriate.

    5. If the return is in STARS, ensure the valid return is deleted from STARS by updating the disposition to DL. A reason must be entered in the STARS return notes when requesting a return be deleted from STARS, see Exhibit 25.25.13-1, STARS Delete Reasons.

Inquiry With Federal Tax Refund Check
  1. An inquiry including a federal tax refund check was received from a prison. The research and procedures listed in IRM 25.25.9.8.1, Prisoner Refund Check Inquiries and Processing Returned Prisoner Tax Refund Treasury Checks - Kansas City ONLY, was completed.

  2. Follow the chart below to resolve the inquiry:

    IF THEN
    Research indicates the return associated with the inquiry meets Return Integrity Verification Operations (RIVO) interest.
    Account Resolution:
    1. Access Treasury Check Information System (TCIS) and cancel the check with reason "F" , if not already done.

    2. Document the Account Management Services (AMS) and the Electronic Fraud Detection System (EFDS) (on the return associated with the refund) that the taxpayer can expect contact and identify the issue(s) with filing (e.g. GATT, inflated withholding, etc.).


    Refund Check Cancellation:
    1. Stamp the check "VOID" and send on a Form 3210, Document Transmittal, to: Regional Finance Center (RFC), Department of the Treasury, Attn: Mail Room Leads, PO Box 51315, Philadelphia, PA 19115.

    2. Monitor the account for the credit to post.

    3. Once the refund has posted to the account (transaction code (TC) 841), input a TC 290 for .00 with a hold code (HC) 4 to post a -K freeze.

    4. Close the RIVO control base with the MISC field of "PRSLEAD" .

    5. Update the 20XX, Prison Check Request Spreadsheet, located on the Austin shared server.


    If GATT:
    1. Input a history on command code (CC) TXMODA "GATTTOAQC" .

    2. Update STARS to Category "8" , disposition "TT" .

    3. Send the return through the appropriate RIVO treatment stream (manual referral to Automated Questionable Credit (AQC), Wage and Withholding Only (WOW), Examination (Exam) or systemically through the Scheme Tracking and Referral System (STARS)).

    Research indicates the return associated with the inquiry does not meet RIVO interest. Research TCIS.
    The check was previously cancelled per TCIS:
    1. Send the "VOID" stamped check on a Form 3210, Document Transmittal, to: Regional Finance Center (RFC), Department of the Treasury, Attn: Mail Room Leads, PO Box 51315, Philadelphia, PA 19115.

    2. Once the refund has posted to the account (TC 841), release the refund and close all RIVO controls.

    3. Update the 20XX, Prison Check Request Spreadsheet, located on the Austin shared server.


    The check was not cancelled per TCIS:
    1. Return the check "LIVE" , (DO NOT VOID), to the facility using Letter 4877, Blue Bag Refund Return.

    2. Input a TC 972 AC 134 with a 1 cycle delay.

    3. Notate AMS and EFDS as appropriate.

    4. Ensure the valid return is deleted from STARS by updating the disposition to DL. A reason must be entered in the STARS return notes when requesting a return be deleted from STARS, see Exhibit 25.25.13-1, STARS Delete Reasons.